CoinMarketCap to Alter Reporting Based on Recent Data on Fake Exchange Volumes
CoinMarketCap will once again change the approach to calculating the data of crypto asset trading, after taking care to exclude distorting data.
CoinMarketCap plans another overhaul of the way it reports information on the trading of digital assets. The decision arrives after a recent report showed that up and coming exchanges may have faked more than 95% of their volumes.
One of the most visited sites for crypto-related information is now in a process of gathering feedback to offer additional data:
In the past, CoinMarketCap has moved to exclude the prices set in Korean won pairings, to avoid including a distorted price with a premium. CoinMarketCap data was so influential, that after the exclusion of Korean Won prices, the market slumped, with short-term deep losses.
The site additionally excluded derivative exchanges and the so-called “transaction mining” exchanges, which were the first to be suspected of unrealistic volumes. Typically, the volumes of BitForex and others are excluded from reporting.
In addition to the upgraded reporting on CoinMarketCap, the OnChainFX service by Messari Crypto is also considering an upgrade. The reports of Messari focus on price movements in relation to all-time highs, as well as other more obscure metrics.
Messari will rely on data from a selection of 10 leading exchanges that present the most realistic volumes. The selection of exchanges will include Binance, Bitfinex, Bitflyer, Bitstamp, Bittrex, Coinbase Pro, Gemini, itBit, Kraken, and Poloniex.
The chief criticism of reporting is based on the fact that market capitalization rarely reflects a real interest in the coin, and may be based on high supply, or other factors that do not distinguish the real qualities of a project.
Additional metrics of liquidity, turnover, or mining data may be helpful in determining the qualities of digital asset projects.
Recently, Messari has also added mining revenue data, to distinguish the qualities of mined coins.